Slowly dying patients, an audit and a hospice's undoing

Death sometimes came slowly at one of the nation's largest and most respected hospices. That's not unusual. But here's a twist: For some patients, it came not at all.

While hospices normally treat patients with fewer than six months to live, San Diego Hospice often served people who had much more time left.  

Not anymore. In the wake of an ongoing federal audit and an internal investigation, the nonprofit hospice's patient load has dropped by hundreds as it targets its services more tightly to only those within the six-month window.

The resulting cash crunch forced it to cut 260 workers and close a 24-bed hospital this month.

Across the country, hospices with generous admissions policies may find themselves on life support too. Medicare, which heavily funds hospice programs, is cracking down on the industry's growing habit of embracing those whose deaths aren't imminent.

It's not clear how many hospice programs are being investigated. But there's definitely an increased level of scrutiny, said J. Donald Schumacher, president and CEO of the National Hospice and Palliative Care Organization.

Indeed, the Health and Human Services Office of the Inspector General has, in recent years, made such investigations a priority. In 2012, for instance, the agency's work plan included an ongoing review and assessment of the "appropriateness of hospices' general inpatient care claims." In addition, the 2013 plan emphasizes the need to examine the relationships between hospices and nursing homes: "OIG found that 82 percent of hospice claims for beneficiaries in nursing facilities did not meet Medicare coverage requirements."

"We're facing a time of much more extraordinary focus on guidelines and regulations," said Kathleen Pacurar, president and CEO of San Diego Hospice, who's had to cut her staff by about 30 percent.

Why this spotlight on hospice? Because it's a booming business, a $14 billion industry that served an estimated 1.65 million people in the United States in 2011. That's about 45 percent of all those who died that year, the hospice association estimates.

Medicare paid for the hospice benefits of 84 percent of those patients. When used properly to provide dying patients with palliative care instead of continuing futile medical treatments, hospice care can save the government money, research has shown.

At San Diego Hospice, the trouble began when federal officials launched an audit of 2009-2010 admissions that's still ongoing. An internal investigation at the hospice revealed that it didn't always properly document that patients had six or fewer months to live, according to Pacurar.

The federal audit led Medicare to temporarily suspend reimbursements to the hospice in November; the hospice briefly stopped taking new patients.

In a statement responding to questions about the San Diego case, the Centers for Medicare & Medicaid Services said: "We take seriously our responsibility to safeguard taxpayer dollars from fraud and abuse. We are working with this facility to ensure that the immediate needs of patients are being met, while actively monitoring billing to prevent abuse or fraud."

Overall, San Diego Hospice's patient load has dropped from 1,000 to about 600, although Pacurar said it continues to accept all eligible patients. She said the numbers have dropped for multiple reasons: the hospice admits fewer patients due to tighter criteria, it has discharged about 100 patients who aren't considered to be within six months of death and it's getting fewer new patients due to bad publicity.

Things may get worse. In its statement, CMS added that any overpayments must be reimbursed to Medicare. Pacurar said she thinks the government won't go as far as to actually cripple the hospice, but there's no way to know.

"That's the hard part about what our organization is going through," she said. "We're one of the first to go through such an extensive audit, and there's the unknown of what they're looking for."

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